AUDIO-Patel says banks to have 4th-quarter house-cleaning

Margaret Patel, senior portfolio manager and a managing director at Evergreen Investments in Boston, said investors can expect “a good house-cleaning” when financial institutions release fourth-quarter earnings, as the housing and subprime crisis continues to take its toll on the sector.

“Everyone is going to throw in the kitchen sink in the fourth quarter,” said Patel, who spoke Tuesday at the Reuters Investment Outlook 2008 Summit in New York.

She said in the first and second quarters, the sector “might still have some additional revelations.” Patel said financial companies will need to find new sources of growth as they put the subprime crisis behind them. “I don’t think we’ll see a huge new wave of mortgage financing, consumer borrowing or business borrowing through the banks,” she said.